Secrets on Eliminating Debt

by Maggie McCormick

In some ways, getting out of debt can seem pretty basic -- spend less than you earn and use the extra money to pay off your debts. Many people have trouble with these basics, though. Knowing a few secrets of eliminating debt can help you beat the odds and get rid of your debt as quickly as possible.

Your Mindset

Getting out of debt requires you to cut back on some of your favorite expenses -- meals out, new clothes and travel to exotic locales. If you feel as though you're depriving yourself, you're going to resent your situation and be in a bad mood all the time. Shake this mindset by focusing on how good it will feel to be out of debt. Challenge your partner to see who can come up with the most fun ways to save money. When you make a game out of it, you can improve your mood and possibly get out of debt faster.

Little Ways to Save

Whether you've created a formal budget or not, you know that you have to allocate a certain amount of money toward your debt. Pay this at the beginning of the month, but don't stop there. As you go through the month, think about all the other little ways that you can save, such as adding your coins to a change jar or eliminating your morning stop at a coffee shop. At the end of the month, apply this extra money toward your debt. Even just $20 will make a difference.

Free Debt Help

Be very cautious about companies who are offering help with your debt. A company that charges you a large up front fee or promises instant results is probably a scam. If you do need help managing your debt, a nonprofit debt counselor can help put you on the right track. You will, however, have to work towards eliminating your debt. There are no easy solutions.

Working with Creditors

When you're struggling financially, you may just want to hide under the covers and avoid it. This can put you into a worse position. Don't think of your creditors as the enemy. Talking to your creditors and explaining your situation can help you to avoid late fees and reduce your interest rate. Often, all you have to do is make a phone call and ask.

Resources

About the Author

Maggie McCormick is a freelance writer. She lived in Japan for three years teaching preschool to young children and currently lives in Honolulu with her family. She received a B.A. in women's studies from Wellesley College.